It is the buildup to the invasion of Iraq. The prime minister and his closest adviser anxiously discuss their options as the drumbeats of war become deafening. The adviser's wife opposes intervention, resulting in tensions on the domestic, as well as the political, front.

Audiences watching Loyalty, a new play to be performed at the Hampstead Theatre in July, will recognise the familiar clash between the political and the personal that divided many homes across the country, as families debated the merits of ousting Saddam Hussein. But the question that will be asked in Whitehall is to what extent the play is art mirroring life.

Loyalty has been written by Sarah Helm, the wife of Tony Blair's chief of staff, Jonathan Powell. As such, she was perfectly placed to observe the psychodrama that engulfed both men in the weeks leading up to the invasion.

Directed by Ed Hall, the son of Sir Peter, and starring Maxine Peake of Channel 4's Shameless as Laura, a character loosely based on Helm herself, the play promises a "unique insider's story of what happened when the Iraq war exploded right into the home of one of the prime minister's closest aides".

While Helm, a journalist and author, insists that the play is fictional, she concedes that the inspiration comes from real events. Even the prime minister in her play is called Tony, although the character of her husband is renamed Nick. "I call it a fictionalised memoir. There is no denying that it draws on real events, but it is a drama and has fictionalised them, so it isn't true and it doesn't purport to be a documentary," she said.

A play that promises "shocking revelations", however, is bound to spark speculation that it is a record of real and dramatic events hitherto known only to a handful of people. The audience eavesdrops on telephone calls between the prime minister and key figures, such as the US president, at crucial times in the buildup to war, inviting questions about whether the dialogue is based on real conversations.

"You can't stop people drawing their own inferences and interpreting it in their own way, as anybody does," Helm said. "But anybody viewing the play will see where it veers away from being a documentary. Although they are clearly based on real characters, they do take on their own fictional reality.

"There's no getting around the fact the prime minister in the play is called Tony and is clearly based on Tony Blair, but events that happen around Tony in the play are fictionalised."

The Iraq war has provided strong material for the arts in recent years. Ian McEwan's novel Saturday was set on the day when a million people marched through London to oppose the invasion. The Ghost, a film based on Robert Harris's novel of the same name, is loosely based on Blair's rise to power and touches on the war. The Government Inspector, Peter Kosminsky's TV drama starring Mark Rylance, was about the death of the weapons expert Dr David Kelly. Hollywood responded with Fair Game, a Washington spy thriller starring Sean Penn.

Helm, who started thinking about writing Loyalty three years ago, said that she had considered turning the material that she had amassed over the years into a novel or diary, but decided that a play was the best medium for conveying what she wanted to say.

"One of the themes of the play is the clash between political and personal demands; how the Iraq war brought its own conflict into our home. That kind of conflict happened in homes all over the country; it was a very emotive issue, but it had more edge and visceral reality in our house because Jonathan was part of the decision-making process."

The Chilcot inquiry, the official investigation into the war, has examined in forensic detail the buildup to the invasion, publishing reams of astonishing evidence that was previously protected by the Official Secrets Act. As a record of key meetings and conversations, it would appear hard to beat.

But Helm believes that she had unprecedented access to observe events that helps provide a human dimension to one of the most controversial decisions in recent years. "I don't believe I was a Blair insider, but in a curious sort of way I was inside the circle at certain times. It's a very important part of the story that needs to be told. I observed things that other people – journalists and inquiry teams – didn't observe: human relations and their impact on decision-making."

In drawing her inspiration from recent events, Helm, who has worked for national newspapers and written a book on the Special Operations Executive, the second world war underground military organisation, has mined a popular seam for playwrights. Lucy Prebble's Enron chronicled the US company's fall, while David Hare's The Power of Yes was about the financial crisis.

But while her subject is deadly serious, Helm wants to entertain. "It's a good story with a few dramatic moments, but I hope it's funny. If you have high politics playing out in your kitchen, you can't help find things funny."